1. The production budget is typically prepared prior to the sales budget. True F

Question

1. The production budget is typically prepared prior to the sales budget. True False 2. One benefit of budgeting is that it coordinates the activities of the entire organization. True False 3. Both planning and control are needed for an effective budgeting system. True False 4. One difficulty with self-imposed budgets is that they are not subject to any type of review. True False 5. The master budget is a network consisting of many separate budgets that are interdependent. True False 6. Planning and control are essentially the same thing. True False 7. Sales forecasts are drawn up after the cash budget has been completed because only then are the funds available for marketing known. True False 8. A sales budget is a detailed schedule showing the expected sales for the budget period; typically, it is expressed in both dollars and units of product. True False 9. Both variable and fixed manufacturing overhead costs are included in the manufacturing overhead budget. True False 10. In the selling and administrative budget, the non-cash charges (such as depreciation) are added to the total budgeted selling and administrative expenses to determine the expected cash disbursements for selling and administrative expenses. True False

Explanation / Answer

The production budget is typically prepared prior to the sales budget. False 2. One benefit of budgeting is that it coordinates the activities of the entire organization. True 3. Both planning and control are needed for an effective budgeting system. True 4. One difficulty with self-imposed budgets is that they are not subject to any type of review. True 5. The master budget is a network consisting of many separate budgets that are interdependent. True 6. Planning and control are essentially the same thing. False 7. Sales forecasts are drawn up after the cash budget has been completed because only then are the funds available for marketing known. True 8. A sales budget is a detailed schedule showing the expected sales for the budget period; typically, it is expressed in both dollars and units of product. True 9. Both variable and fixed manufacturing overhead costs are included in the manufacturing overhead budget. True 10. In the selling and administrative budget, the non-cash charges (such as depreciation) are added to the total budgeted selling and administrative expenses to determine the expected cash disbursements for selling and administrative expenses. False

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